Limiting H1B Visas Would Worsen America’s Existing Talent Shortage

The H1B visa debate highlights a complex challenge for US immigration policy. While president-elect Donald Trump’s voter base advocates for stricter immigration controls to protect American jobs, a diverse coalition — including technology giants, startup founders, venture capitalists, and prominent figures like Elon Musk — emphasises the indispensable role of skilled foreign workers in driving economic growth and innovation.

The rumoured changes to the H1B programme, such as raising salary thresholds and increasing application scrutiny, could significantly impact Indian professionals, who constitute a substantial portion of H1B beneficiaries. For these workers, the H1B is not just an opportunity but a crucial pathway to global careers. Many use this visa as a stepping stone to establish startups, lead successful tech ventures, and ascend to senior leadership roles in prominent US firms.

Elon Musk, CEO of Tesla and SpaceX, has been vocal in his support for the H1B programme, stating, "Silicon Valley wouldn’t exist without H1B visas." Similarly, Aravind Srinivas, the Indian-origin co-founder and CEO of Perplexity AI, has been praised for creating over 100 jobs in the United States, highlighting the significant contributions of immigrant entrepreneurs to the US economy.

Exacerbate Talent Shortage

Experts The Core spoke to said that limiting H1B visas would exacerbate the already critical talent shortage in America’s science, technology, engineering, and mathematics (STEM) fields. They also highlighted the crucial role of skilled immigrants, particularly from India, in driving innovation and competitiveness in the US economy, warning that such restrictions could have far-reaching consequences for industries reliant on cutting-edge technology skills.

As Sonal Kapoor, chief commercial officer at Prodigy Finance, said, “The US remains a top destination, particularly for STEM courses, despite increased scrutiny on visa applications.” Despite increased scrutiny and challenges, Kapoor said that the US continues to attract talent globally due to its unmatched ecosystem for career growth.

The United States is currently facing a significant shortage of skilled workers in STEM fields, which poses a threat to the nation's economic growth and global competitiveness. According to the National Association of Manufacturing and Deloitte, by 2025, the US will need to fill 3.5 million STEM jobs, with over 2 million potentially going unfilled due to a lack of qualified candidates.

This gap is further highlighted by the US Bureau of Labor Statistics, which projects that employment in STEM occupations will grow by 10.4% from 2023 to 2033, compared to a 4% growth rate for all occupations. Despite this increasing demand, the domestic supply of STEM graduates is not keeping pace, leading to a reliance on foreign-born professionals to fill these critical roles.

Foreign-born workers constitute a substantial portion of the US STEM workforce, making up 19% of those with a bachelor's degree or higher. Another 45% of this foreign worker subset in STEM is particularly concentrated at the doctorate level in fields such as computer and mathematical sciences, engineering, and life sciences. China and India are the leading birthplaces for these foreign-born STEM doctorate holders in the United States.

Rozy Efzal, co-founder & director of Invest4Edu, a platform for education planning said that the US has some of the largest valued companies that are always on the hunt for top talent not just within their country but across the globe as well. “Even if there is a scenario of cuts in worker visas, these firms will continue to look for talent pool especially from overseas at any cost,” added Efzal

In recent years, major American technology companies have significantly increased their reliance on H-1B visa holders, while leading Indian IT firms have reduced their dependence on these visas. An analysis by The Economic Times reveals that between 2015 and 2023, US tech giants such as Amazon, Google, Meta, Microsoft, and Apple collectively increased their use of H-1B visas by 189%. Amazon led this surge with a 478% increase, followed by Meta at 244% and Google at 137%.

In contrast, India's top seven IT services companies, including TCS, Wipro, Infosys, and HCL, reduced their H-1B visa usage by 56% over the same period.

This shift indicates a strategic change in talent acquisition, with US tech companies increasingly seeking specialised skills through H-1B visas, while Indian IT firms focus on local hiring and other global delivery models.

Let us take the trend of global capability centres (GCCs). In recent years, US companies have significantly increased their investments in Global Capability Centers (GCCs) in India, recognizing the country's vast talent pool and cost-effective solutions. India now hosts over 1,700 GCCs, generating revenues of $64.6 billion—a 40% increase over the previous fiscal year—and accounting for 17% of the global GCC capacity. This expansion of GCCs in India seen in the context of the sustained demand for H-1B visas by US companies, further underscores the American economy's reliance on Indian talent.

"India has the highest number of global capability centres (GCCs) in the world. For Indian professionals with US or UK degrees, especially those working abroad on H1B visas, GCCs offer a strong opportunity to return home, earn competitive salaries, and still contribute to global projects," said Prof. (Dr.) Dwarika Prasad Uniyal, Pro-Vice Chancellor of RV University.

Misuse of H1B

The H1B visa programme has long been a cornerstone of the US-India talent exchange, but it is not without its criticism. As Uniyal RV University explained, the programme has been misused in some cases to exploit cost arbitrage. “H1B is being misused by both US and Indian companies to pay less to Indian talent. It worked well in the 1990s and 2000s, with Indian companies like Infosys, Wipro, and TCS and others making their money around this model,” he added.

At the same time, the Uniyal also highlighted the growing influence of Indian-origin leaders in shaping US policy. Figures like Vivek Ramaswamy, founder of Perpelexity.ai, a third-generation American of Indian descent, are increasingly making their presence felt in US politics. “These individuals are Americans now, not Indians anymore. They’ve created a positive image and are making a dent in US policy,” he said.

This means that the Indian diaspora’s relationship with the US is not just economic but also political. This is further exemplified by the recent appointment of Sriram Krishnan as Senior Policy Advisor for Artificial Intelligence in the Trump administration. Prior to this, Kirshnan was a General Partner at Andreessen Horowitz (a16z), one of Silicon Valley’s leading Venture Capital firms.

India, however, faces its own challenges in balancing the benefits of its global talent pipeline with the risks of brain drain. Remittances, a significant contributor to the Indian economy, remain a vital consideration in India’s policy stance on emigration. As Uniyal noted, “India gets a lot of remittances from the US We provide facilities like OCI and non-resident taxation benefits to support these workers and their families. Yet, at the same time, we want to retain our best talent.”

He also pointed out the market-driven nature of talent migration. “It’s a market game. Whoever pays the most gets the best,” Uniyal added, highlighting the competitive dynamics between countries and companies vying for top talent. Despite these complexities, he expressed scepticism about any immediate changes to H1B policies, stating that no knee-jerk reactions are expected in the next two to three years from the new US-administration.